Lost Tobacco Tax Revenue in the United States

The Bureau of Alcohol, Tobacco, Firearms and Explosives estimates that the federal, state and local governments lose a combined total of nearly $10 Billion a year in tax revenue due to the smuggling of cigarettes across state lines. Back in 2010, the estimated tobacco tax loss to the United States was $5 Billion a year.

In the State of Virginia, that tax on a pack of cigarettes is $0.30. In the State of New York, the tax rate is $4.35.

Smuggled cigarettes makes up to 40 percent of the entire cigarette market is made up of cigarettes smuggled in from other locations.

A smuggler can fill up a car with 600 cases of cigarettes, and can fit 12,000 cases into a large van.

Source: “Cigarette-smuggling: The urge to smurf,” Economist, November 24, 2012.